KEY POINTS
- The PHPC is directly pegged to the Philippine Peso and will be backed by Coins.ph's bank-held cash
- The BSP will monitor the pilot for functionality and benefits in real-world applications
- The Philippines doesn't have a regulatory framework that caters to various subsectors in the crypto industry
The Philippine central bank has given the green light for local cryptocurrency company Coins.ph to pilot a Philippine Peso-pegged stablecoin called PHPC, marking a significant step in the country's transition toward regulated digital assets.
"This initiative falls under the BSP's (Bangko Sentral ng Pilipinas) Regulatory Sandbox Framework, which is designed to enable the development and testing of emerging or new technology to deliver financial products and services in a controlled environment," Coins.ph said in a recent blog post.
The crypto firm explained that PHPC is designed to be directly pegged 1:1 with the Philippine Peso and will be supported by Coins.ph's cash and cash equivalents that are held in Philippine bank accounts. The said system ensures that PHPC will retain a stable value and users can redeem their PHPC tokens for local currency.
Since the initiative falls under the BSP's Regulatory Sandbox, the pilot will be monitored for its functionality and potential benefits in real-world applications. Its impact on traditional financial ecosystems will also be assessed to ensure that the proposed stablecoin is compliant with the established guardrails focused on consumer, data privacy, and anti-money laundering and counter-terrorism financing (AML/CFT) protection.
Coins.ph, which describes itself as the country's "most established crypto brand," reiterated that the stablecoin's broader market implementation will hinge on the results obtained by the company. The BSP will also need to conduct final evaluations on the pilot before it is approved for public implementation.
"This pilot marks a crucial step for Coins.ph and the wider financial landscape in the Philippines. It serves a vital platform to test the potential of digital currencies in enhancing financial inclusion," said the company, which is regulated by the BSP.
The Philippines has yet to come up with a regulatory framework that directly caters to the crypto industry. The BSP does have Circular No. 944, which requires virtual currency exchanges to register with the central bank as remittance and transfer companies and establish "adequate safeguards" to address crypto-related risks.
However, the said regulation is quite limited and does not provide specific notes about stablecoins and other cryptocurrencies or other crypto-related businesses beyond exchanges.
On the other hand, the Philippine Securities and Exchange Commission (SEC) appears to have started a crackdown on the crypto sector. Late in March, the regulator blocked Binance, the world's largest digital assets exchange by trading volume.
The SEC said Binance was operating in the country without a license, and the regulator deemed that continued access to Binance "poses a threat to the security of the funds of investing Filipinos."
